[CLBS] float home/homestead

[Jeremy Gugino]

1. There is probably a way to get your declaration of homestead filed, but
even if you do, I would hope the trustee objects.  The facts you set forth
seem a little flimsy as to his intent to make that his permanent residence.
2.  Yes, the trustee gets the rent for as long as there is a tenant.  11 USC
541(a)(6)

Lots of potential risk here - and your debtor should be advised as such
before he files.  He could lose the floating home.

-----Original Message-----
From: CLBS [mailto:clbs-bounces at admws.idaho.gov] On Behalf Of Randal French
Sent: Thursday, July 18, 2013 10:06 AM
To: Catherine Dullea; clbs at admws.idaho.gov
Subject: Re: [CLBS] float home/homestead

Very tough questions.  Look at the decisions allowing a homestead exemption
on a mobile home, Rogers, 225 BR 755 (Bankr. D. Idaho 1998) and a motor
home, Peters, 168 BR 710 (Bankr. D. Idaho 1994) for guidance as to exempting
a homestead without a legal description.  I think those decisions rested on
the debtor actually occupying the mobile home or motor home, not intending
to reside there later.

If Debtor does not occupy the property, then the Debtor would seem to need
the equivalent of the filing of a notice of declaration of homestead
identifying the intent to reside on the homesteaded property.  I.C. 55-1004.
That also references a homestead declaration for a mobile home located on
land not owned by debtor, and allows a homestead from and after delivery of
a declaration as described in section 55-1006.  55-1006 still calls for
recording, not delivery, of a homestead declaration.

You might look at other states whether people may more commonly live on
houseboats, like Calif and Florida, maybe Washington and Oregon.  That might
provide some insight.

Even if you can exempt the floathome, the trustee may demand the rents.
Gugino has done so in this area.  If you could rather quickly get the
property abandoned, §554, that might limit the damage.  The trustee may
oppose that effort because even though the exempted asset is of
inconsequential value to the estate, §554(a), the rents are of value.  An
argument may be that after the time period for objecting to a claim of
exemption runs, if there is no objection, then should the property be
considered "removed" from the estate, as I recall some courts having
characterized the effect of an exemption.  The problem is that the assets
may be removed from the estate only to the extent that the equity in the
asset is less than the amount of the exemption.  You can exempt a home and
have no objection to the exemption, but if there is equity above the exempt
amount the trustee can still sell the home and keep equity above the
exemption.  That being the case, it is hard to say that the asset, as
opposed to the exempt equity, was removed from the estate.

If the estate does not assume the lease within the statutory time, the lease
is deemed rejected.  365(d)(1).  Leases of real property includes any rental
agreement, §365(m), presumably including a month to month agreement.  Is
there an argument that a trustee should be prohibited from receiving rent
from a rejected lease agreement?  Does the inclusion in 541(a)(6) of rents
of or from property of the estate provide an independent basis for
collecting rents even if the lease is rejected?  Sounds like a basis for a
good article for the bk section newsletter for an insightful practitioner.

Good luck.


-----Original Message-----
From: CLBS [mailto:clbs-bounces at admws.idaho.gov] On Behalf Of Catherine
Dullea
Sent: Tuesday, July 16, 2013 3:35 PM
To: 'Bankruptcy list'
Subject: [CLBS] float home/homestead



Listmates:
Potential chapter 7 client owns a "float home".  It is not a boat, it's a
house that floats and it is relatively permanently moored at a marina.  It
is hooked up to sewer, water, electricity, phone, etc.  Client doesn't
currently live in the float home and has it rented out.  He does intend to
live there again, and if it were real property I'd know just how to protect
it, with a recorded homestead declaration.  But he doesn't own the real
property and I don't think the Kootenai County Recorder would record a
homestead declaration without a legal description.  
 
1.    How do I protect this asset as his homestead without him having to
evict his tenants and move back in?
2.    If I can do that, is the Trustee entitled to the rent he's collecting?
If so, for how long?
 
--Katie Dullea
 
 
 
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